When you buy a vehicle, your lender is typically granted a security interest in the car. This means that the vehicle is pledged to the lender as collateral for the loan so if you fail to make your payments or otherwise default on your loan, the lender can repossess the car or truck.
What is default?
What constitutes a default is defined in the contract you sign when you purchase the vehicle. The most common form of default occurs when you miss a payment. Another type of default may include failing to keep the car covered by adequate insurance. Many contracts provide the consumer with a grace period in which he or she can cure the default before any negative consequences occur. If you cure the default within the grace period, your loan goes on as if the default didn’t happen. However, if you fail to cure the default within the grace period, the lender has the right to seize your vehicle.
How will my car be repossessed?
It is very unsettling to think about leaving your car parked somewhere and to walk out finding it missing. A repossession agent can take your vehicle with or without your knowledge and/or permission. New Jersey laws provide consumers with certain protections to ensure that both you and your property are safe.
The law requires your lender to provide you with notice of your default. Most lenders do not want to spend the time and money to repossess your vehicle if they can persuade you to make your payments. In New Jersey, your lender may go through the court to seize your car, but it is not required. Additionally, your lender may either repossess your car or “may render equipment unusable and dispose of collateral on a debtor’s premises.” N.J.S.A. 12A:9-609. If your vehicle is seized, the repo agent will leave you a notice that your car was seized so you don’t think it was stolen.
What actions take the repo agent take?
The repo guy is allowed to walk onto your property and repossess your vehicle. However, he is prohibited from breaking into a closed or locked structure such as your garage. He is allowed to seize your car with all of your belongings in it. Thus, if you are home when your car is being repossessed, you should ask the repo agent to allow you to remove your personal belongings before he takes the car. Otherwise, you must contact the repossession company to recover your personal items from your vehicle.
Although a repo agent is not allowed to threaten you or harm your property in any way, you are not allowed to fight him. If you believe that the repo guy has acted illegally or abused you, keep careful records and contact a seasoned attorney for help.
To learn what happens to your car after it has been repossessed, please read our next blog titled “What Happens After Your Car is Repossessed.”
If you would like to learn more about vehicle repossessions or how you can deal with your debt, contact us today. During your free consultation, attorneys Bruce Levitt and Shelley Slafkes will carefully explain all of your options so you can make an informed decision about how to best proceed. Contact us today at 973-323-2953 to schedule a free initial consultation with a compassionate and knowledgeable lawyer.